Investor Relations

Press Release

DALLAS, Jan. 3, 2019 /PRNewswire/ -- Invitation Homes Inc. (NYSE: INVH) ("Invitation Homes" or the "Company") today announced that on December 28, 2018 the Company notified holders of its 3.00% Convertible Senior Notes due 2019 (the "Notes"), which mature on July 1, 2019, of the Company's intent to settle conversions of the Notes with common shares. The par value of the Notes outstanding is $230 million.

Invitation Homes has the option to settle conversions of the Notes in cash, common shares, or a combination thereof. The Company believes that a common share settlement is the option most aligned with its stated balance sheet strategy of reducing leverage and pursuing an investment grade rating.

For all note holders electing conversion on or before June 27, 2019, the Notes will be exchanged for common shares according to a prescribed conversion ratio. As of September 30, 2018, the conversion ratio was 53.7294 shares per $1,000 principal amount of Notes. This conversion ratio is subject to adjustment, through the date of maturity, for cash dividends paid to common stockholders and other potential transactions as described in Section 10.04(d) of the indenture for the Notes. In the event that note holder(s) do not elect conversion by June 27, 2019, such Notes would be repaid in cash at the par value of the Notes on the maturity date.

Assuming the September 30, 2018 conversion ratio of 53.7294 shares per $1,000 principal amount of Notes, settlement of the $230 million (par value) of Notes would result in the issuance of approximately 12.4 million common shares and a reduction in cash interest expense of approximately $6.9 million on an annualized basis.

On a pro forma basis, whereby net debt is reduced for the impact of the conversion of the Notes, net debt / annualized Adjusted EBITDAre at September 30, 2018 would have been 9.1x, versus 9.4x as reported by the Company in its third quarter 2018 Earnings Release and Supplemental Information.

Reconciliation of Net Debt / Annualized Adjusted EBITDAre

(in thousands, except for ratio) (unaudited)

9/30/2018

Pro Forma

9/30/2018

As Reported

Adjustments(1)

Pro Forma

Mortgage loans, net

$7,409,700

-

$7,409,700

Term loan facility, net

1,490,138

-

1,490,138

Convertible senior notes, net

555,081

(226,804)

328,277

Total Debt per Balance Sheet

9,454,919

(226,804)

9,228,115

Retained and repurchased certificates

(395,941)

-

(395,941)

Cash, ex-security deposits

(230,148)

-

(230,148)

Deferred financing costs

66,544

-

66,544

Unamortized discounts on note payable

22,993

(3,189)

19,804

Net Debt (A)

$8,918,367

($229,993)

$8,688,374

Q3 2018

Pro Forma

Q3 2018

As Reported

Adjustments(1)

Pro Forma

Net income available to common shareholders(2)

$824

$2,777

$3,601

Net income available to participating

securities

196

-

196

Non-controlling interests

21

-

21

Interest expense(2)

97,564

(2,777)

94,787

Depreciation and amortization

139,371

-

139,371

EBITDA

237,976

-

237,976

Gain on sale of property, net of tax

(11,512)

-

(11,512)

Impairment on depreciated real estate

investments

1,296

-

1,296

EBITDAre

227,760

-

227,760

Share-based compensation expense

6,068

-

6,068

Merger and transaction-related expenses

3,339

-

3,339

Severance

1,952

-

1,952

Casualty losses, net

1,956

-

1,956

Other, net

(3,330)

-

(3,330)

Adjusted EBITDAre

$237,745

-

$237,745

Annualized Adjusted EBITDAre (C = B x 4)

$950,980

$950,980

Net debt / annualized Adjusted EBITDAre

(A / C)

9.4x

9.1x

(1)

Does not include adjustments for refinancing or voluntary prepayments of securitized loans after 9/30/2018.

Invitation Homes is a leading owner and operator of single-family homes for lease, offering residents high-quality homes across America. With more than 80,000 homes for lease in 17 markets across the country, Invitation Homes is meeting changing lifestyle demands by providing residents access to updated homes with features they value, such as close proximity to jobs and access to good schools. The company's mission, "Together with you, we make a house a home," reflects its commitment to high-touch service that continuously enhances residents' living experiences and provides homes where individuals and families can thrive.